Trouble defining your business goals? This is one of the more common topics when I meet with managers and executives. For example, in a survey made on small business owners in the U.S. over 80% said that they don't keep track of their business goals, and 77% hadn't even gotten around to defining the company's vision. So, looks like you're in good company then - but here's why you shouldn't want to be:
- 84% of the entire class didn't have any defined goals
- 13% of the class had goals, and had written them down, but had no defined plan to reach them
- 3% of the class had both written goals and defined plans
Then, ten years later it gets interesting; the 3% with written goals and defined plans were making ten times as much as the rest, 97%, of the class.
It definitely pays off to define goals and a strategy to reach them - no matter if it's as an individual or a business! Fact is, you are 42% more likely to achieve your goals if you write them down. And if you want to engage other people around a goal and align work efforts to reach it, it is imperative that a goal is defined, written down and easily accessible to those involved.
Before we continue I want to emphasize that for you to better succeed later in reaching your goals, don't miss out on how to engage and align your work force: 3 must-do's for Strategy Execution
So, how should you go about to define your goals?
Your more long-term goals
In today's fast paced world it's hard to have too long of a perspective (think +5 years) when planning ahead - or at least you should then be prepared to revise and adapt quickly if needed - but 3 years ahead seems to be something many managers I speak to are comfortable planning for.
Pro tip: When you define these goals, remember why your company exists in the first place. This will probably ease your definitions and make them sound less forced.
If you don't know where to start, here are 3 areas for you to define your goals around:
- Growth (e.g. new markets or revenue)
- Employees (e.g. survey results, sick-leave or retention)
- Sustainability (e.g. climate footprint or social contributions)
Your more short-term goals
Your short-term goals are the more defined plan on how to reach your overall goals - it's important that these are aligned and connected together. In fact, think of your short-term goals as your strategies. These should be planned in a yearly or quarterly perspective.
My finding is that a strategy consists of a defined goal, KPIs to regularly measure progress and strategic activities (that can consist of many tasks). To make it easier to engage, align and succeed with your strategy execution - you would therefore benefit from working according to the S.M.A.R.T methodology:
Specific: Be clear and detailed on what the goal is. This will make it easier to engage and align, as well as know when a goal is reached or not. E.g. "We will be in the top 30 of our industry in terms of growth % by Q4 this year".
- Measurable: If you want to keep track of progress and deviations, and have any chance of making accurate forecasts, you need to measure. Define KPIs in e.g. $ or %. Your can either put a specific target goal, or satisfy on just following the trend and act if it turns negative.
- Action-Oriented: Define strategic activities, with a clear start- and finish date and specific persons who are responsible for its execution. These activities should then be broken down to several tasks and projects, involving several people.
- Realistic: Goals, KPIs and Activities should be planned in a realistic manner, or else you can easily loose engagement in your work force. It can help to break down a figure to make it sound more realistic, e.g. growing revenue by 36% in a year could seem impossible, but 3% per month could seem doable.
- Time-specific: Be clear on the time perspective for your goal (e.g. year or quarter?), how often the KPI's need follow-up and when you activities have their deadline.
Look over your goals so they're not conflicting
It's easy to want to "have your cake and eat it" - e.g. a corporate goal could be that you want to excel in customer service - yet at the same time you want to increase your margins. It's hard to achieve both, as it's expensive to maintain a high quality customer service.
If you are in this situation you should:
- Choose one of the goals, or
- Lower the targets so they seem more realistic, or
- Define (other) areas for e.g. the margin increase so they seem less conflicting.
Before you go, I just want to give you a last tip: Don't forget to give praise to your employees when reaching their deadlines, targets and goals. Good luck defining your goals! Should you want any help, please feel free to contact me!